Wednesday, 9 October 2019
Ceisteanna - Questions - Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions
Local Enterprise Offices
2. To ask the Minister for Jobs, Enterprise and Innovation her plans to conduct a review of local enterprise offices; her further plans to introduce reforms to the local enterprise office network; and if she will make a statement on the matter. [41217/19]
I thank the Deputy for raising the issue. Future Jobs Ireland is the Government’s plan to meet the challenges of productivity performance and technological changes which we face as an economy and as a society. Under Future Jobs Ireland, I am committed to strengthening the capacity of the LEOs to provide a comprehensive suite of supports for indigenous Irish businesses and entrepreneurs, including addressing any gaps in such supports in order to achieve a step-change in enterprise productivity and innovation and to build resilience for the future.
Enterprise policy is a rolling agenda and requires a continuous assessment of action to be undertaken on an annual basis. The operations of our enterprise agencies are regularly reviewed and evaluated, including in regard to the effectiveness of their enterprise supports structures. Many of the actions in the Department’s overarching enterprise policy agenda, Future Jobs Ireland, at both business environment and firm level, are key to driving productivity growth across all sectors, including investments in talent and in physical, digital and research infrastructures. The LEOs are also working towards these aims and ambitions.
Enterprise Ireland is responsible for the overall administration of the local enterprise offices in partnership with my Department and the local authorities, and this is a partnership which is working extremely well. The LEOs, working locally on the ground, are at the coalface of business supports for microenterprises in all their variations throughout Ireland and understand the needs of their local business community.
Under budget 2019, the local enterprise office funding has been increased by 22% through additional capital funding of €5 million and this increase is being used to assist microenterprises in becoming more competitive and better able to cope with the changing environment in which they do business. The suite of LEO Brexit supports includes tailored mentoring to address Brexit-related business challenges and targeted ongoing training on specific Brexit challenges, such as customs clearance.
In terms of plans for reviewing the operations of the LEOs, the Department has been working with the OECD Centre for Entrepreneurship, SMEs, regions and cities on a crucial review of SME and entrepreneurship policies and issues. This review is currently nearing completion and will be launched on 23 October 2019.
As the Minister of State is aware, the State is overly reliant on a fairly small number of multinationals for a significant portion of its tax take. Last year, 45% of the total corporation tax take came from just ten companies and foreign-owned multinationals paid 77% of the corporation tax receipts for last year. This would leave our public finances very vulnerable to any sudden economic or political change and the European Commission has also raised concerns about this fact. The regime also leads to a regional imbalance, as those of us from outside of the cities know all too well. In order to develop our indigenous businesses, we need to strengthen the LEOs and increase supports. The Minister of State said the Government gave an additional €5 million but there is a lack of State support for non-FDI, non-exporting companies and in regions other than Border or Gaeltacht areas. The local enterprise offices across the country support small businesses with grants and assist entrepreneurs. Does the Minister of State agree they need strengthening?
I have to emphasise the importance of the 31 local enterprise offices around the country, which have played a significant role in our economic recovery. Some 98% of enterprises in the country are SMEs and they employ nearly 70% of the working population, a figure which is even higher for microenterprises. What is important about the regions that they drive job creation, not just in counties and regions, but in every community. We continue to support the LEOs and I believe there has been a 30% increase in their funding since I became Minister of State in 2016. That will continue and the Minister, Deputy Humphreys, has already referred to the loans announced yesterday in budget 2020 for Microfinance Ireland and a further €5 million in grants for the LEOs.
We are monitoring the situation closely. In preparation for Brexit, we have had a lot of meetings throughout the country and mentoring is going on all the time with the LEO companies. It is interesting to note the number of microenterprises that have gone from being a LEO enterprise to being an Enterprise Ireland company. The LEOs are extremely important because they create jobs in every county. Last year, they created 3,700 net jobs and I believe that with the funding in place this year through the €2.5 million LEO competitive fund, this will attract more entrepreneurship and more start-ups to compete for that funding and to build on that success.
The scale and ambition of the LEOs needs to be increased.
Sinn Féin has a policy on this area. We would incorporate the existing 31 individual offices under a national headquarters and supply 100 additional staff who would co-ordinate activities within the 31 offices. We would also provide for 100 additional mobile advisers who would go out to businesses. I am sure the Minister of State has often heard many local business owners who are setting up say they do not have the time to seek advice because they are concentrating on setting up their businesses. The provision of an additional 100 mobile advisers would be particularly important also in the light of Brexit, whatever form that will take. Will the Minister of State acknowledge there is merit in the Government adopting a similar policy to strengthen the scale and the ambitions of the LEOs, particularly in light of what we could be facing?
The Deputy must acknowledge the great work that has been done and the way we work with the LEOs. I referred in my reply to the collaboration between the local authorities and Enterprise Ireland. Those bodies along with the Department work with the 31 LEOs around the country. Most LEOs are located at the front of local authority buildings. They are very prominent. In terms of the work we have been doing to develop the LEOs, the student entrepreneurship awards are important. We also have the Entrepreneur of the Year award in respect of which we receive many applications and many people are entering this area. A good deal has been done in this area. The Minister and I meet the LEOs on a twice-yearly basis. This year, they celebrated their fifth birthday. They have created more than 18,000 jobs since they were established. We have new arrangements in place, together with the resources we are giving the LEOs, including human resources. Each LEO now has a graduate, a young person working in the digital and technical area. which is important. I ask the Deputy to take note of the OECD report and the report we have put together, which we hope to launch in mid-October. It sets out the shortcomings for small businesses in the country and how we can improve matters in that respect. Addressing those shortcomings will be a priority for us to ensure the LEOs and microenterprises play a very important role in the regions.